Reinventing Health Care: Health System Transformation

Reinventing Health Care: Health System Transformation Aspen Institute Patrick Conway, M.D., MSc CMS Chief Medical Officer Director, Center for Clinical Standards and Quality Acting Director, Center for Medicare and Medicaid Innovation September 25, 2013

Discussion Our Goals and Early Results Value-based purchasing and quality improvement programs Center for Medicare and Medicaid Innovation Quality Measurement to Drive Improvement Future and Opportunities for collaboration

Size and Scope of CMS Responsibilities CMS is the largest purchaser of health care in the world (approx $900B per year) Combined, Medicare and Medicaid pay approximately one-third of national health expenditures. CMS programs currently provide health care coverage to roughly 105 million beneficiaries in Medicare, Medicaid and CHIP (Children s Health Insurance Program); or roughly 1 in every 3 Americans. The Medicare program alone pays out over $1.5 billion in benefit payments per day. CMS answers about 75 million inquiries annually. Millions of consumers will receive health care coverage through new health insurance programs authorized in the Affordable Care Act.

We need delivery system and payment transformation Current State Producer-Centered Volume Driven Unsustainable PRIVATE SECTOR Future State People-Centered Outcomes Driven Sustainable Fragmented Care Systems PUBLIC SECTOR Coordinated Care Systems FFS Payment Systems New Payment Systems Value-based purchasing ACOs Shared Savings Episode-based payments Care Management Fees Data Transparency 4

The 3T s Road Map to Transforming U.S. Health Care Basic biomedical science Clinical efficacy Clinical effectiveness T1 T2 T3 knowledge knowledge Improved health care quality & value & population health Key T1 activity to test what care works Clinical efficacy research Key T2 activities to test who benefits from promising care Outcomes research Comparative effectiveness Research Health services research Key T3 activities to test how to deliver high-quality care reliably and in all settings Quality Measurement and Improvement Implementation of Interventions and health care system redesign Scaling and spread of effective interventions Research in above domains Source: JAMA, May 21, 2008: D. Dougherty and P.H. Conway, pp. 2319-2321. The 3T s Roadmap to Transform U.S. Health Care: The How of High-Quality Care.

Transformation of Health Care at the Front Line At least six components Quality measurement Aligned payment incentives Comparative effectiveness and evidence available Health information technology Quality improvement collaboratives and learning networks Training of clinicians and multi-disciplinary teams Source: P.H. Conway and Clancy C. Transformation of Health Care at the Front Line. JAMA 2009 Feb 18; 301(7): 763-5 6

Early Example Results Cost growth leveling off - actuaries and multiple studies indicated partially due to delivery system changes But cost and quality still variable Moving the needle on some national metrics, e.g., Readmissions Line Infections Increasing value-based payment and accountable care models Expanding coverage with insurance marketplaces gearing up for 2014 7

Results: Medicare Per-Capita Spending Growth at Historic Low 6% 4% 2% 0% 2008-2009 2009-2010 2010-2011 2011-2012 Total Medicare Source: CMS Office of the Actuary, Midsession Review FY 2013 Budget

Wide Variation in Spending Across the Country: CT Scans CT Scans Per Capita Spending* (2011) National Average = $76 Honolulu, HI $49 per capita Fort Myers, FL $117 per capita Ratio to the national average *includes institutional and professional spending

Percent Medicare All Cause, 30 Day Hospital Readmission Rate 19.5 19.0 18.5 18.0 17.5 17.0 Jan-10 Jan-11 Jan-12 Jan-13 Rate CL UCL LCL Source: Office of Information Products and Data Analytics, CMS

CLABSIs per 1,000 central line days National Bloodstream Infection Rate 2.5 2 1.5 1 0.5 0 41 % Reduction 1.133 Baseline Q1 Q2 Q3 Q4 Q5 Q6 Over 1,000 ICUs achieved an average 41% decline in CLABSI over 6 quarters (18 months), from 1.915 to 1.133 CLABSI per 1,000 central line days. Quarters of participation by hospital cohorts, 2009 2012

The Six Goals of the National Quality Strategy 1 Make care safer by reducing harm caused in the delivery of care 2 Strengthen person and family engagement as partners in their care 3 Promote effective communication and coordination of care 4 Promote effective prevention and treatment of chronic disease 5 Work with communities to promote healthy living 6 Make care affordable

CMS has a variety of quality reporting and performance programs, many led by CCSQ Hospital Quality Physician Quality Reporting PAC and Other Setting Quality Reporting Payment Model Reporting Population Quality Reporting Medicare and Medicaid EHR Incentive Program Medicare and Medicaid EHR Incentive Program Inpatient Rehabilitation Facility Medicare Shared Savings Program Medicaid Adult Quality Reporting PPS-Exempt Cancer Hospitals Inpatient Psychiatric Facilities Inpatient Quality Reporting HAC payment reduction program Readmission reduction program PQRS erx quality reporting Nursing Home Compare Measures LTCH Quality Reporting ESRD QIP Hospice Quality Reporting Home Health Quality Reporting Hospital Value-based Purchasing Physician Feedback/Value-based Modifier CHIPRA Quality Reporting Health Insurance Exchange Quality Reporting Medicare Part C Medicare Part D Outpatient Quality Reporting Ambulatory Surgical Centers 14

CMS framework for measurement maps to the six national priorities Greatest commonality Clinical quality of care HHS primary care and CV quality measures Prevention measures Setting-specific measures Specialty-specific measures Person- and Caregivercentered experience and engagment CAHPS or equivalent measures for each settings Shared decision-making Care coordination Transition of care measures Admission and readmission measures Other measures of care coordination Safety Healthcare Acquired Infections Healthcare acquired conditions Harm Population/ community health Measures that assess health of the community Measures that reduce health disparities Access to care and equitability measures Efficiency and cost reduction Spend per beneficiary measures Episode cost measures Quality to cost measures of measure concepts across domains Measures should be patientcentered and outcomeoriented whenever possible Measure concepts in each of the six domains that are common across providers and settings can form a core set of measures

Increasing individual accountability Increasing commonality among providers Quality can be measured and improved at multiple levels Community Population-based denominator Multiple ways to define denominator, e.g., county, HRR Applicable to all providers Measure concepts should roll up to align quality improvement objectives at all levels Practice setting Denominator based on practice setting, e.g., hospital, group practice Patient-centric, outcomes oriented measures preferred at all three levels Individual clinician and patient Denominator bound by patients cared for Applies to all physicians Greatest component of a physician s total performance The six NQS domains can be measured at each of the three levels

Value-Based Purchasing Goal is to reward providers and health systems that deliver better outcomes in health and health care at lower cost to the beneficiaries and communities they serve. Hospital value-based purchasing program shifts approximately $1 billion based on performance Five Principles - Define the end goal, not the process for achieving it - All providers incentives must be aligned - Right measure must be developed and implemented in rapid cycle - CMS must actively support quality improvement - Clinical community and patients must be actively engaged VanLare JM, Conway PH. Value-Based Purchasing National Programs to Move from Volume to Value. NEJM July 26, 2012 17

The CMS Innovation Center Identify, Test, Evaluate, Scale The purpose of the [Center] is to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to individuals under such titles. - The Affordable Care Act 19

CMS Innovations Portfolio: Testing New Models to Improve Quality Accountable Care Organizations (ACOs) Medicare Shared Savings Program (Center for Medicare) Pioneer ACO Model Advance Payment ACO Model Comprehensive ERSD Care Initiative Primary Care Transformation Comprehensive Primary Care Initiative (CPC) Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration Federally Qualified Health Center (FQHC) Advanced Primary Care Practice Demonstration Independence at Home Demonstration Graduate Nurse Education Demonstration Bundled Payment for Care Improvement Model 1: Retrospective Acute Care Model 2: Retrospective Acute Care Episode & Post Acute Model 3: Retrospective Post Acute Care Model 4: Prospective Acute Care Capacity to Spread Innovation Partnership for Patients Community-Based Care Transitions Million Hearts Health Care Innovation Awards State Innovation Models Initiative Initiatives Focused on the Medicaid Population Medicaid Emergency Psychiatric Demonstration Medicaid Incentives for Prevention of Chronic Diseases Strong Start Initiative Medicare-Medicaid Enrollees Financial Alignment Initiative Initiative to Reduce Avoidable Hospitalizations of Nursing Facility Residents 20

Innovation is happening broadly across the country 21 21

Accountable Care Organizations (ACOs) Vision An ACO promotes seamless coordinated care Puts the beneficiary and family at the center Attends carefully to care transitions Manages populations of patients Evaluates data to improve care and patient outcomes Innovates around better health, better care and lower growth in costs through improvement Invests in team-based care, workforce, and quality infrastructure 22

4 million Medicare beneficiaries having care coordinated by 220 SSP and 32 Pioneers ACOs (Geographic Distribution of ACO Population) 23

State Innovation Models GOALS: Partner with states to develop broad-based State Health Care Innovation Plans 6 Implementation and 19 Design/Pre-testing States Plan, Design, Test and Support of new payment and service and delivery models Utilize the tools and policy levers available to states Engage a broad group of stakeholders in health system transformation Coordinate multiple strategies, payers, and providers into a plan for health system improvement 24

Health Care Innovation Awards Round Two GOAL: Test new innovative service delivery and payment models that will deliver better care and lower costs for Medicare, Medicaid, and Children s Health Insurance Program (CHIP) enrollees. Test models in four categories: 1. Reduce Medicare, Medicaid and/or CHIP expenditures in outpatient and/or post-acute settings 2. Improve care for populations with specialized needs 3. Transform the financial and clinical models for specific types of providers and suppliers 4. Improve the health of populations 25

Partnership for Patients: Hospitals Continue to Generate Increases in Reporting, Improvement and Achievement on More Harm Areas 26

We re Focused On Innovation Center 2013 Looking Forward Implementation of Models Monitoring & Optimization of Results Evaluation and Scaling Integrating Innovation across CMS Portfolio analysis and launch new models to round out portfolio 27

Possible Model Concepts Outpatient specialty models Practice Transformation Support Health Plan Innovation Consumer Incentives ACOs version 2.0 Home Health SNF More.. 28

We are starting to see results nationally Cost trends are down, Outcomes are Improving & Adverse Events are Falling Total U.S. health spending grew only 3.9 percent in 2011 Medicare trend over 3 years at historic lows - +.4% in 2012 Medicaid spending per beneficiary has decreased over last two years -.9% and.6% in 2011 and 2010 Pioneer model with early promising results, Partnership for Patients Expanding coverage with insurance marketplaces gearing up for 2014 29

Discussion Our Goals and Early Results Value-based purchasing and quality improvement programs Center for Medicare and Medicaid Innovation Future and Opportunities for collaboration

The Future of Quality Measurement for Improvement and Accountability Meaningful quality measures increasingly need to transition away from setting-specific, narrow snapshots Reorient and align measures around patient-centered outcomes that span across settings Measures based on patient-centered episodes of care Capture measurement at 3 main levels (i.e., individual clinician, group/facility, population/community) Why do we measure? Improvement Source: Conway PH, Mostashari F, Clancy C. The Future of Quality Measurement for Improvement and Accountability. JAMA 2013 June 5; Vol 309, No. 21 2215-2216

Opportunities and Challenges of a Lifelong Health System Goal of system to optimize health outcomes and lower costs over much longer time horizons Payers, including Medicare and Medicaid, increasingly responsible for care for longer periods of time Health trajectories modifiable and compounded over time Importance of early years of life Source: Halfon N, Conway PH. The Opportunities and Challenges of a Lifelong Health System. NEJM 2013 Apr 25; 368, 17: 1569-1571

Financial Instruments and models that might incentivize lifelong health management Horizontally integrated health, education, and social services that promote health in all policies, places, and daily activities Consumer incentives (value-based insurance design) Warranties on specific services Bundled payment for suite of services over longer period Measuring health outcomes and rewarding plans for improvement in health over time Community health investments ACOs could evolve toward community accountable health systems that have a greater stake in long-term population health outcomes

Contact Information Dr. Patrick Conway, M.D., M.Sc. CMS Chief Medical Officer Director, Center for Clinical Standards and Quality Acting Director, Center for Medicare and Medicaid Innovation 410-786-6841 patrick.conway@cms.hhs.gov 34